Full Judgment Text
2025 INSC 1500
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. of 2025
(@ Special Leave Petition (C) No.444 of 2024)
State of Uttar Pradesh
...Appellant
Versus
Krishna Murari Sharma
...Respondent
O R D E R
Leave granted.
2. The State is aggrieved with the judgment of the High
Court, which upheld the order of the Labour Court, in a
reference regarding the validity of termination of the
respondent workman affirming the award, which found the
termination to be illegal and directed the employer to pay
back wages to the workman for the period from 31.05.2006
to 01.04.2015; the date of commencement being the date of
reference, since there was a 15 years delay occasioned. The
Signature Not Verified
question raised by the State is only on the delay occasioned,
Digitally signed by
SAPNA BISHT
Date: 2025.12.24
15:13:53 IST
Reason:
having disentitled the workman from challenging the order
of termination.
Page 1 of 9
CA @ SLP (C) No.444 of 2024
3. Mr. Rana Mukherjee, learned Senior Counsel for the
State submits that there is gross delay, which disentitles the
order of back wages, but the State is not averse to a
compensation, as declared by this Court in a series of
decisions, which the learned Senior Counsel submits, the
Advocate-on-Record has instructions to concede to a
payment of Rs.99,000/- (Rupees Ninety Nine Thousand).
4. Mr. Sukumar Patjoshi, learned Senior Counsel
appearing for the respondent vehemently opposes the
argument and submits that the back wages would come to
at least Rs.15,00,000/- (Rupees Fifteen Lakhs) and there
could be no interference caused to the award on the ground
of delay. Respondent-workman would rely on Shahaji v.
1
Executive Engineer, PWD and U.P. State Electricity Board
2
v. Rajesh Kumar . Learned Senior Counsel would contend
that having not questioned the reference, there is no
question of a contention on delay being taken at this stage
or before the High Court, wherein it was first taken.
5. We have to immediately notice that though the
reference as such was not challenged, the State had raised
1
(2005) 12 SCC 141
2
CA No.1343 of 2003 decided on 18.12.2003
Page 2 of 9
CA @ SLP (C) No.444 of 2024
a contention of delay in its written submissions filed at the
first instance before the Labour Court, Bareilly as is
revealed from Annexure P2. It was specifically contended
that the respondent-workman was only engaged till
October, 1990 on a monthly honorarium and he had not
submitted a single application seeking reinstatement after
his service ceased. It was also categorically averred that
there was no justification for submitting the application
seeking reinstatement after a gap of about more than 15
years from the date of termination of service.
6. As to the legal point, we notice that there are two
distinct aspects on which there are two separate lines of
decisions insofar as the issue of delay in seeking a
reference. One of these is with respect to the challenge
against a reference order itself, before the High Court under
Article 226 of the Constitution of India and the other, the
consequences of a delay while adjudicating a reference
3
under the Industrial Disputes Act, 1947 .
3
For brevity ‘the ID Act’
Page 3 of 9
CA @ SLP (C) No.444 of 2024
4
7. National Engineering Industry v. State of Rajasthan ,
held that though the Labour Court/Industrial Tribunal is not
competent to examine the validity of the reference, the High
Court under Article 226 of the Constitution of India is
competent to examine it. It was categorically held that the
High Court can entertain a writ petition challenging a
reference on the ground of non-existence of an actual or
apprehended industrial dispute. Following the said
decision in Nedungadi Bank Ltd. v. K.P. Madhavankutty
5
and Ors. , it was held that when there is a stale issue
referred for adjudication, its validity can be questioned
under Article 226 of the Constitution of India on that ground.
Therein the workman was dismissed after a lawful and
proper disciplinary enquiry, his dismissal was upheld in an
appeal and his legally due benefits in its entirety were also
paid to him. Seven years after the dismissal, a dispute was
raised, which was found to be bad not only on the ground of
delay but as well as on the ground of no industrial dispute
existing. The scope of judicial review insofar as a reference,
though limited it might be, was upheld, negating the
4
(2000) 1 SCC 371
5
(2000) 2 SCC 455
Page 4 of 9
CA @ SLP (C) No.444 of 2024
contention that when a reference is made under Section 10
of the ID Act, the Labour Court has to perforce decide the
same on its merits.
8. In the instant case, admittedly no such challenge
under Article 226 of the Constitution of India was made
against the reference; which does not prevent or prohibit
the employer from raising the question before the Labour
Court itself. Before going to the series of decisions on the
consequences of a delay in seeking reference, we cannot
but observe that the mere failure, or a conscious decision
not to challenge, the reference under Article 226 of the
Constitution of India before the High Court, on the ground
of delay, can neither result in the contention being
frustrated in every manner nor can there be a ground of
acquiescence taken against such plea. This is the purport of
the decisions, which we will immediately refer to
hereunder.
9. Ajaib Singh v. Sirhind Coop. Marketing-cum-
6
Processing Service Society Ltd. and Ors. dealt with the
question of delay of 7 years in approaching the appropriate
6
(1999) 6 SCC 82
Page 5 of 9
CA @ SLP (C) No.444 of 2024
Government for a reference, which was found to be fatal by
the High Court, the Full Bench of which prescribed a
limitation period of 5 years to seek a reference under
Section 10 of the ID Act. It was held that the employer’s plea
of delay raised against adjudication of an industrial dispute
ought to be fortified with proof of real prejudice and
otherwise, a bland plea was not sufficient to deny relief to
the workman. It was also held that even in cases of proved
delay, relief can be moulded by declining whole or part of
back wages. Therein, despite the delay the employer failed
to raise the ground before the Labour Court and raised it for
the first time before the High Court. For all the above
reasons, this Court upheld the award of reinstatement and
continuity of service, but considering the delay, limited the
back wages from the date of issuance of notice of demand
till the date of the award, to 60% and thereafter full back
wages.
10. Assistant Engineer Rajasthan State Agricultural
7
Marketing Board v. Mohan Lal was concerned with a
6
limitation of 6 years. Ajaib Singh was held to be not laying
7
(2013) 14 SCC 543
Page 6 of 9
CA @ SLP (C) No.444 of 2024
down an absolute proposition of law that where plea of
delay is not raised by the employer, there would be no
justification for moulding the relief. It was held noticing a
series of decisions that the Labour Court considering the
aspect of delay, at its discretion could mould the relief, since
delay in raising an industrial dispute is definitely a
circumstance to be reckoned by the Labour Court; though
the Limitation Act, 1963 is not applicable to the references
made under the ID Act. In the said case, in lieu of
reinstatement, a compensation of Rs.1,00,000/- (Rupees
One Lakh) was directed to be paid.
1
11. Even Shahaji relied on by the respondent-workman
accepted the principle that the Labour Court, if finding the
termination to be illegal could suitably mould the relief to
be granted to the workman in view of the delay. Rajesh
2
Kumar was a case in which the ground of stale claim was
not raised before the Labour Court and was first urged
before the High Court. As we noticed at the outset, in the
present case, the failure of the State, or the conscious
decision taken not to challenge the order of reference does
not deny the employer-State the right to raise that
Page 7 of 9
CA @ SLP (C) No.444 of 2024
contention before the Labour Court. Moreover, the same
had been raised at the first instance before the Labour Court
and this is not a case where for the first time the ground of
delay was urged before the High Court or before this Court.
12. Learned Senior Counsel for the State has also fairly
submitted that he would not be averse to a lumpsum
compensation being paid in lieu of the entire back wages as
directed by the employer.
13. Taking the entire circumstances into account,
especially the fact that there was a 16 year delay in seeking
a reference, we are of the opinion that a lumpsum
compensation of Rs.2,50,000/- (Rupees Two Lakhs and fifty
thousand) would suffice. The order of the Labour Court as
affirmed by the High Court are both set aside to the extent
of reinstatement and award of back wages. While upholding
the award regarding the illegality of the termination,
reckoning the gross delay caused, a lumpsum
compensation of Rs.2,50,000/- (Rupees Two Lakhs and fifty
thousand) would be paid to the respondent-workman within
a period of two months from the date of receipt of certified
copy of this order. If the said sum is not paid within the
Page 8 of 9
CA @ SLP (C) No.444 of 2024
period stipulated, the State shall be liable to pay interest at
the rate of 7% per annum from the date of expiry of the two-
month period.
14. The appeal stands allowed with the above directions
and pending application(s), if any, shall stand disposed of.
……...…….……………………. J.
(AHSANUDDIN AMANULLAH)
...………….……………………. J.
(K. VINOD CHANDRAN)
NEW DELHI;
December 17, 2025.
Page 9 of 9
CA @ SLP (C) No.444 of 2024
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. of 2025
(@ Special Leave Petition (C) No.444 of 2024)
State of Uttar Pradesh
...Appellant
Versus
Krishna Murari Sharma
...Respondent
O R D E R
Leave granted.
2. The State is aggrieved with the judgment of the High
Court, which upheld the order of the Labour Court, in a
reference regarding the validity of termination of the
respondent workman affirming the award, which found the
termination to be illegal and directed the employer to pay
back wages to the workman for the period from 31.05.2006
to 01.04.2015; the date of commencement being the date of
reference, since there was a 15 years delay occasioned. The
Signature Not Verified
question raised by the State is only on the delay occasioned,
Digitally signed by
SAPNA BISHT
Date: 2025.12.24
15:13:53 IST
Reason:
having disentitled the workman from challenging the order
of termination.
Page 1 of 9
CA @ SLP (C) No.444 of 2024
3. Mr. Rana Mukherjee, learned Senior Counsel for the
State submits that there is gross delay, which disentitles the
order of back wages, but the State is not averse to a
compensation, as declared by this Court in a series of
decisions, which the learned Senior Counsel submits, the
Advocate-on-Record has instructions to concede to a
payment of Rs.99,000/- (Rupees Ninety Nine Thousand).
4. Mr. Sukumar Patjoshi, learned Senior Counsel
appearing for the respondent vehemently opposes the
argument and submits that the back wages would come to
at least Rs.15,00,000/- (Rupees Fifteen Lakhs) and there
could be no interference caused to the award on the ground
of delay. Respondent-workman would rely on Shahaji v.
1
Executive Engineer, PWD and U.P. State Electricity Board
2
v. Rajesh Kumar . Learned Senior Counsel would contend
that having not questioned the reference, there is no
question of a contention on delay being taken at this stage
or before the High Court, wherein it was first taken.
5. We have to immediately notice that though the
reference as such was not challenged, the State had raised
1
(2005) 12 SCC 141
2
CA No.1343 of 2003 decided on 18.12.2003
Page 2 of 9
CA @ SLP (C) No.444 of 2024
a contention of delay in its written submissions filed at the
first instance before the Labour Court, Bareilly as is
revealed from Annexure P2. It was specifically contended
that the respondent-workman was only engaged till
October, 1990 on a monthly honorarium and he had not
submitted a single application seeking reinstatement after
his service ceased. It was also categorically averred that
there was no justification for submitting the application
seeking reinstatement after a gap of about more than 15
years from the date of termination of service.
6. As to the legal point, we notice that there are two
distinct aspects on which there are two separate lines of
decisions insofar as the issue of delay in seeking a
reference. One of these is with respect to the challenge
against a reference order itself, before the High Court under
Article 226 of the Constitution of India and the other, the
consequences of a delay while adjudicating a reference
3
under the Industrial Disputes Act, 1947 .
3
For brevity ‘the ID Act’
Page 3 of 9
CA @ SLP (C) No.444 of 2024
4
7. National Engineering Industry v. State of Rajasthan ,
held that though the Labour Court/Industrial Tribunal is not
competent to examine the validity of the reference, the High
Court under Article 226 of the Constitution of India is
competent to examine it. It was categorically held that the
High Court can entertain a writ petition challenging a
reference on the ground of non-existence of an actual or
apprehended industrial dispute. Following the said
decision in Nedungadi Bank Ltd. v. K.P. Madhavankutty
5
and Ors. , it was held that when there is a stale issue
referred for adjudication, its validity can be questioned
under Article 226 of the Constitution of India on that ground.
Therein the workman was dismissed after a lawful and
proper disciplinary enquiry, his dismissal was upheld in an
appeal and his legally due benefits in its entirety were also
paid to him. Seven years after the dismissal, a dispute was
raised, which was found to be bad not only on the ground of
delay but as well as on the ground of no industrial dispute
existing. The scope of judicial review insofar as a reference,
though limited it might be, was upheld, negating the
4
(2000) 1 SCC 371
5
(2000) 2 SCC 455
Page 4 of 9
CA @ SLP (C) No.444 of 2024
contention that when a reference is made under Section 10
of the ID Act, the Labour Court has to perforce decide the
same on its merits.
8. In the instant case, admittedly no such challenge
under Article 226 of the Constitution of India was made
against the reference; which does not prevent or prohibit
the employer from raising the question before the Labour
Court itself. Before going to the series of decisions on the
consequences of a delay in seeking reference, we cannot
but observe that the mere failure, or a conscious decision
not to challenge, the reference under Article 226 of the
Constitution of India before the High Court, on the ground
of delay, can neither result in the contention being
frustrated in every manner nor can there be a ground of
acquiescence taken against such plea. This is the purport of
the decisions, which we will immediately refer to
hereunder.
9. Ajaib Singh v. Sirhind Coop. Marketing-cum-
6
Processing Service Society Ltd. and Ors. dealt with the
question of delay of 7 years in approaching the appropriate
6
(1999) 6 SCC 82
Page 5 of 9
CA @ SLP (C) No.444 of 2024
Government for a reference, which was found to be fatal by
the High Court, the Full Bench of which prescribed a
limitation period of 5 years to seek a reference under
Section 10 of the ID Act. It was held that the employer’s plea
of delay raised against adjudication of an industrial dispute
ought to be fortified with proof of real prejudice and
otherwise, a bland plea was not sufficient to deny relief to
the workman. It was also held that even in cases of proved
delay, relief can be moulded by declining whole or part of
back wages. Therein, despite the delay the employer failed
to raise the ground before the Labour Court and raised it for
the first time before the High Court. For all the above
reasons, this Court upheld the award of reinstatement and
continuity of service, but considering the delay, limited the
back wages from the date of issuance of notice of demand
till the date of the award, to 60% and thereafter full back
wages.
10. Assistant Engineer Rajasthan State Agricultural
7
Marketing Board v. Mohan Lal was concerned with a
6
limitation of 6 years. Ajaib Singh was held to be not laying
7
(2013) 14 SCC 543
Page 6 of 9
CA @ SLP (C) No.444 of 2024
down an absolute proposition of law that where plea of
delay is not raised by the employer, there would be no
justification for moulding the relief. It was held noticing a
series of decisions that the Labour Court considering the
aspect of delay, at its discretion could mould the relief, since
delay in raising an industrial dispute is definitely a
circumstance to be reckoned by the Labour Court; though
the Limitation Act, 1963 is not applicable to the references
made under the ID Act. In the said case, in lieu of
reinstatement, a compensation of Rs.1,00,000/- (Rupees
One Lakh) was directed to be paid.
1
11. Even Shahaji relied on by the respondent-workman
accepted the principle that the Labour Court, if finding the
termination to be illegal could suitably mould the relief to
be granted to the workman in view of the delay. Rajesh
2
Kumar was a case in which the ground of stale claim was
not raised before the Labour Court and was first urged
before the High Court. As we noticed at the outset, in the
present case, the failure of the State, or the conscious
decision taken not to challenge the order of reference does
not deny the employer-State the right to raise that
Page 7 of 9
CA @ SLP (C) No.444 of 2024
contention before the Labour Court. Moreover, the same
had been raised at the first instance before the Labour Court
and this is not a case where for the first time the ground of
delay was urged before the High Court or before this Court.
12. Learned Senior Counsel for the State has also fairly
submitted that he would not be averse to a lumpsum
compensation being paid in lieu of the entire back wages as
directed by the employer.
13. Taking the entire circumstances into account,
especially the fact that there was a 16 year delay in seeking
a reference, we are of the opinion that a lumpsum
compensation of Rs.2,50,000/- (Rupees Two Lakhs and fifty
thousand) would suffice. The order of the Labour Court as
affirmed by the High Court are both set aside to the extent
of reinstatement and award of back wages. While upholding
the award regarding the illegality of the termination,
reckoning the gross delay caused, a lumpsum
compensation of Rs.2,50,000/- (Rupees Two Lakhs and fifty
thousand) would be paid to the respondent-workman within
a period of two months from the date of receipt of certified
copy of this order. If the said sum is not paid within the
Page 8 of 9
CA @ SLP (C) No.444 of 2024
period stipulated, the State shall be liable to pay interest at
the rate of 7% per annum from the date of expiry of the two-
month period.
14. The appeal stands allowed with the above directions
and pending application(s), if any, shall stand disposed of.
……...…….……………………. J.
(AHSANUDDIN AMANULLAH)
...………….……………………. J.
(K. VINOD CHANDRAN)
NEW DELHI;
December 17, 2025.
Page 9 of 9
CA @ SLP (C) No.444 of 2024